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How Will the Hanjin Bankruptcy Affect My Shipments?

Hanjin Shipping declared bankruptcy in 2016. This is how the bankruptcy impacted importers.

Flexport

On Wednesday August 31, 2016, Hanjin Shipping Co Ltd filed for court receivership due to insolvency. Flexport is working closely with our entire network of carriers and partners to monitor and mitigate the impact to our clients, but this development will nonetheless affect all shippers and consignees to some extent.

This is uncharted territory and no one in the industry knows what to expect. That said, please see below for our assessment of the likely impact.

Hanjin is taking no new bookings, effective immediately. Hanjin is the 7th-largest ocean carrier; removing all Hanjin vessels from the global container freight market will sharply reduce available space across the other carriers.

How will this affect my shipments?

If you are currently shipping with Hanjin, your Logistics Manager has checked in with you and will continue to be in touch about next steps. We will update you as we learn more.

How will this affect freight rates more generally?

The Hanjin insolvency will impact all importers, even those not currently shipping with Hanjin:

  • Ocean freight rates will go up across all carriers due to reduced supply.
  • The General Rate Increase for September 1 will hold, and we expect additional rate increases to follow.
  • Even importers with contract rates will find it harder to get bookings and will experience more rolled bookings as space tightens.
  • As shippers switch their ocean cargo to air freight, to maintain inventories, air rates are likely to increase as space tightens

How will this impact transit times?

Expect significant delays due to limited space. September was already expected to be a month of delays due to Golden Week in China; the additional space constraints will make the delays more severe.

Please reach out to your Logistics Manager with any questions. We will provide additional updates as soon as we have them.

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